Selig said in a statement that the 17-year television deal with Fox was ?structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt? and would mortgage the team?s future.
Frank McCourt has blamed Selig?s refusal to approve the deal, which is worth $2.5 billion to $3 billion, for his financial problems. In April, Selig took control of the team and installed a trustee, Tom Schieffer, to run it.
Selig?s decision is likely to reinforce McCourt?s fear that baseball will seize the team and sell it against his wishes, and could send McCourt to federal court to fight the commissioner.
A lawyer for McCourt, Steve Susman, issued a statement saying that Selig?s action was ?not only a disappointment, but worse, is potentially destructive to the Los Angeles Dodgers and Major League Baseball.? Susman vowed to ?explore vigorously our options and remedies? in light of Selig?s decision.
A flashpoint in the deal is a $385 million upfront loan from Fox that would reduce the annual rights fee to the team. Only $211.5 million of the $385 million would finance team operations.
Of the rest, $80 million would repay debt, which Major League Baseball says is too high; $23.5 million would repay most of a $30 million personal loan from Fox that McCourt used to meet payroll last month; $10 million would pay the McCourts? legal fees; and $10 million would be spent as they desire.
McCourt could use another $50 million of the Fox money to bankroll a $100 million payment to his wife if the team were declared his property by Judge Scott Gordon of Los Angeles Superior Court, who is overseeing the divorce.
Gordon had scheduled a one-day trial Aug. 4 to determine if McCourt retains ownership of the team or if it is ruled community property and sold. But that and the rest of the divorce agreement were voided by Selig?s rejection of the Fox deal. Selig approves all 30 teams? TV deals and loans.
McCourt could resuscitate the Fox deal by sharply reducing or eliminating the $385 million payment, but he needs that influx of money now to stabilize his team?s finances.
The Dodgers? current TV deal with Prime Ticket, a regional sports network owned by Fox, expires in 2013. The new one would replace the last three seasons of that contract and extend it through 2027. As part of the transaction, a company owned by McCourt would have received a 35 percent stake in Prime.
Under the deal, Fox would have lent Prime $385 million, which then would have been distributed to the McCourt subsidiary. That critical payment, which Selig might have approved for a team with less debt or an owner he trusted more, looks to be a central issue in a lawsuit by the Dodgers.
Susman said that the Dodgers had complied with all of M.L.B.?s requirements to approve the Fox deal. But Selig was not swayed.
Source: http://feeds1.nytimes.com/~r/nyt/rss/Sports/~3/uswUahPrey4/baseball-rejects-dodgers-tv-deal.html
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